A new report is calling for a massive expansion of non-market housing in order to make it more affordable to live in British Columbia.
The report from the Canadian Centre for Policy Alternatives (CCPA) think-tank says high housing costs are eroding the province’s economy.
It calls on all three levels of government to implement a range of policy changes to bring down the cost of housing in the province — including tax reform, zoning changes and more.
B.C. consistently has led Canada when it comes to high housing costs, particularly in regards to rental housing. The report’s authors say Canada’s housing system has “largely been a mechanism for increasing wealth and inequality.”
The report comes a little under a month before the provincial election in B.C., with housing costs set to be a major issue when voters go to the polls on Oct. 19.
Alex Hemingway, a senior economist at the CCPA who co-wrote the report with Marc Lee, said that property wealth in B.C. has increased by over a trillion dollars in the last couple of decades.
“We have a situation where one of the big divides in this province has become between those with access to housing wealth and those without it,” Hemingway said.
“You know, that’s a consequence of that housing shortage. And we need to address the shortage to deal with that fundamentally.”
The CCPA report asks for the province to commit to building 250,000 non-market rental units, which it says would lead to below-market rents and preserve affordability over time.
“Both the federal National Housing Strategy and the provincial Building B.C. program have been slow to deliver the type of community or social housing that was built from the 1960s to 1990s and that remains a cornerstone of housing affordability several decades later,” the report reads.
It adds that the province and federal government have recently committed to building on public land and offering low-interest loans to developers building affordable rental units — which could lower the rents that would need to be charged in order for the builder to recoup their costs.
The B.C. government has announced changes to the province’s building code. It’s meant to spur more low- and mid-rise multi-family buildings by allowing just one stairwell rather than the minimum two. But as Rob Easton reports, that has B.C.’s fire chiefs worried.
Upzoning and tax reform needed, authors say
The report says B.C. has a severe shortage of both non-market and rental apartments, and that local and provincial governments should work to upzone areas zoned for single-family homes to allow for greater housing density.
“Here in B.C., we’ve been under-building for decades,” Hemingway said.
“Canada Mortgage Housing Corporation estimates we need to be building about 600,000 units above our current building trend. That’s consistent with other estimates.”
A provincial government housing program that gives taxpayer-subsidized loans to developers is coming under fire. One rental building in Kitsilano, B.C., that was originally touted as “affordable” is now advertising rents between $2,500 and $4,000 a month. As Katie DeRosa reports, the listings are prompting critics to question the definition of “affordable.”
B.C. recently introduced a swath of legislation to encourage density in its cities, allowing for multi-unit dwellings on single-family lots and properties near transit hubs.
Hemingway says the changes, which have faced pushback from some municipalities, constitute “small steps forward” that need to be improved upon with more binding requirements from the province.
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The economist adds that B.C. should eliminate the homeowner grant, which he says is unique among Canadian provinces, and introduce a progressive tax based on land value to level the playing field.
“We see that grant go to 91 per cent of homeowners, including those who have, you know, enjoyed very large wealth gains from that housing,” he said.
“And I think many of them would be the first to admit that they don’t need it.”
Hemingway suggests the homeowner grant be replaced with an income-tested benefit that would go to both renters and homeowners on a more equitable basis.
Finance professor disagrees
Andrey Pavlov, a finance professor at Simon Fraser University’s Beedie School of Business, says he agrees with the report’s assertion that unaffordable housing is impacting B.C.’s economy.
However, he says the report’s proposals would make it more expensive and riskier to invest in the province, and funding for housing needs to come from the private sector.
“When property taxes are already so high, talking about raising them further — even just the mere possibility of mentioning that — detracts from the ability of investors to invest here,” Pavlov said.
He suggests that the province roll back regulations and taxes instead in order to encourage investors to build homes at larger scales.